BROOKFIELD OFFICE PROPERTIES INC PREFERENCE SHARES CLASS AAA SERIES II stock forum
BPO.PR.A par value is $25. Interest rate is set to renew on January 1, 2025 based on the 5-year Government of Canada bond yield + 3.15 as it is on or about December 2nd. bpy.brookfield.com/bpo/preferred-sharesCurrent base rate being paid is 4.71% based on the par value (meaning that 5 years ago, the rate was set when the 5-year Bond was at 1.56%. Current 5-year Bond as of this posting (2024-10-09) has increased to 3.06%.
IMHO it is highly unlikely that this rate will drop 150 basis points in 7 weeks unless COVID24 shows up (this is a joke - if somehow we look back and this happened - buy me - or my widow - a lottery ticket). Assuming another pandemic didn't happen, then the new dividend could be in the range of 5.71-6.21%
The latter would be approximately 39 cents every quarter, up from the current 29. At current price (15.06) would be 10.3% yield.
If Brookfield repurchases units because they can get better rates than 6.21%, the par value would be paid out = almost 67% return on current capital.
Current yield is roughly 7.8%. To maintain this rate after renewal, the price would need to be 19.90/sh - or 32.1% return on current price.
So - it is a win-win. Buy now, you will see close to 10% yield with the March 2025 dividend, or you'll get a January repurchase.
Full Disclosure: I currently hold a position in this stock personally.